Do Megamergers Make Sense?

Davidson, Kenneth

doi:10.1108/eb039163

Cited by 12 publications

(3 citation statements)

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“…Traditional centralized structures based upon functional departments (Uform systems) proved inappropriate for managing this diversity increasing the impetus toward decentralized M-form structures (Chandler, 1962;Williamson, 1975). The trend toward diversification is even more noticeable recently with megamergers becoming prevalent (Davidson, 1987), further reinforcing the use of M-form structures. Williamson (1975) argued that the M-form provides a number of beneficial features for managing diversity.…”

Section: M-form Controls Short-term Efficiency and Risk Avoidancementioning

confidence: 99%

Strategic control systems and relative r&d investment in large multiproduct firms

Hoskisson

Hitt

1988

Strategic Management Journal

466

232

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This paper hypothesizes that tight financial controls associated with large diversified Mform firms lead to a short-term, low-risk orientation and thereby lower relative investment in R& D. Further, it is hypothesized that increasing levels of diversification require different control systems which have signifcant implications for investing in R&D. Results of the study of 124 major U.S. firms suggest that less diversified U-form firms invest more heavily in R&D than more diversijied M-form firms after controlling for size and industry effects. Additionally, dominant business firms invested more in R& D than either related or unrelated business firms. Finally, the relationship between R&D intensity and market performance was negative for related and unrelated firms. The findings suggest that the market evaluates R&D investment more positively for firms that are organized to seek synergy than for those that are organized to pursue a hedging (or diversification) strategy.

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Section: M-form Controls Short-term Efficiency and Risk Avoidancementioning

confidence: 99%

Strategic control systems and relative r&d investment in large multiproduct firms

Hoskisson

Hitt

1988

Strategic Management Journal

466

232

View full text Add to dashboard Cite

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“…With such large deal value, mega-deals play a significant role in firms' operation, generally receive widespread publicity and are under more investor scrutiny and corporate governance (Alexandridis et al, 2017). Specifically, mega-deals are usually undertaken as a strategic move by those largest and most successful firms who expect to accumulate more revenues beyond the established patterns (Davidson, 1987). For example, from the deals of IBM-Lotus, ExxonMobil-XTO, and more recently Facebook-WhatsApp, acquirers have used target firms as a springboard into a new market and to obtain the augmentation of business ranges.…”

Section: Introductionmentioning

confidence: 99%

Do mega-mergers create value? The acquisition experience and mega-deal outcomes

Lü

et al. 2020

Journal of Empirical Finance

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The full-text may be used and/or reproduced, and given to third parties in any format or medium, without prior permission or charge, for personal research or study, educational, or not-for-prot purposes provided that:• a full bibliographic reference is made to the original source • a link is made to the metadata record in DRO • the full-text is not changed in any way The full-text must not be sold in any format or medium without the formal permission of the copyright holders.

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“…Horizontal integration strategies also played a fundamental role in the form of mergers, acquisitions, and takeovers among competitors, and as a way to conduct a growth strategy leading to achieving larger economies of scale and enhancing the transfer of resources and competencies. Davidson (1987) argues that mergers between direct competitors are more likely to create efficiencies than mergers between unrelated businesses, both because there is a greater potential for eliminating duplicate facilities and because the management of the acquiring firm is more likely to understand the business of the target. Typically, this is been the situation with a number of global shipping companies taking over the regional ones, as well as global port terminal operators who acquired a number of both ocean and river terminals.…”

Section: -Leadership and Strategy Theory To Meet Stakeholder Needsmentioning

confidence: 99%

The role of the Atlantic corridor project as a form of strategic community of practice in facilitating business transformations in Latin America

Arroyo

Walker

2010

Int J Managing Projects in Bus

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This thesis examines the way that a change management entity facilitated a deep and lasting business transformation, undertaken as a major program of projects that were engaged in business process re-engineering, logistics supply change management and formation of joint ventures and forms of alliance. It takes a project management perspective of this change agent with a strong focus on how it achieved change through leadership, co-learning strategies and collaboration.This study takes place within the context of a unique historical period of economic transition for Latin America.By the time the globalization wave started to hit South America in the late 80s, both its national economies and various logistic segments were used to operating within a protective and restrictive business context. Regional companies enjoyed operating within bilateral treaties and under the scope of a wide array of subsidies and protective regulations that let them grow without having to face the complexities of a truly competitive free market. On the contrary, foreign companies either found regional entry barriers simply too high or that these barriers deterred them from expanding across a new potential market.

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Do Megamergers Make Sense?

Cited by 12 publications

References 0 publications

Strategic control systems and relative r&d investment in large multiproduct firms

Strategic control systems and relative r&d investment in large multiproduct firms

Do mega-mergers create value? The acquisition experience and mega-deal outcomes

The role of the Atlantic corridor project as a form of strategic community of practice in facilitating business transformations in Latin America

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